eBay Bids $1.2B for Korea E-Commerce Leader

eBay offered to buy South Korean online retailer Gmarket for up to $1.2 billion, making it the leader in the world's sixth-largest e-commerce market.

The U.S. online auctioneer said it already secured 67 percent of Gmarket (NASDAQ: GMKT), as top shareholders including Yahoo and Interpark agreed to eBay's (NASDAQ: EBAY) cash tender offer.

Interpark, a South Korean online mall operator, said it would sell its 29 percent stake in Gmarket to eBay for $350 million, while Yahoo (NASDAQ: YHOO) said it was selling its 10 percent stake.

A source familiar with the situation said the sale would result in $120 million in proceeds for Yahoo, and a $52 million pre-tax gain.

The tender price of $24 per share represents a 20.2 percent premium to Gmarket's latest close of $19.96. Assuming all outstanding shares are tendered, the total purchase price would be about $1.2 billion.

NASDAQ-listed Gmarket runs customer-to-customer market places and has more than 10 million registered users in South Korea. It competes with eBay's South Korean unit, Internet Auction Co.

eBay said it would combine Gmarket, which is focused on fashion, with Internet Auction, whose strengths are in electronics and sports goods.

When combined, Gmarket and Internet Auction would have 87 percent of the country's online customer-to-customer market and more than 30 percent of the Web shopping mall market, according to the Korean antitrust agency.

eBay had already won conditional approval from the antitrust watchdog.

The deal is expected to close in the current quarter, and Gmarket shares will delist from NASDAQ on completion.

Shares in Interpark were down 6.9 percent by 12:23 a.m. EDT after earlier hitting their highest level since mid-December 2007. The KOSDAQ market was up 1.6 percent.

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